Spiralling insurance premiums will put more small family-owned enterprises out of business unless the Government takes action to tackle fraudulent claims.
That’s according to Eoin McCambridge, a director of the Alliance for Insurance Reform and Managing Director of McCambridge’s of Shop Street, who said inaction over the issue has already closed countless businesses.
Immediate action needs to be taken against insurance fraud, said Mr McCambridge, who together with the Insurance Reform Alliance, is calling for the expedition of establishing the long-awaited Garda Insurance Fraud Unit and a Judicial Council to review guidelines for insurance claims.
“It’s a mixture of things that is driving up the cost. The insurance companies and the legal profession are playing off each other and they’re both creaming it,” said Mr McCambridge.
He explained that his insurance premium has risen dramatically in recent years – doubling every year for three years, and rising by around ten per cent for the past two years.
As a result, the premium for McCambridge’s Shop Street premises was €125,000 this year – and he said they’re left with no option but to pay it.
Recently, a number of large businesses, including Galway man Pat McDonagh’s Supermac’s, have opted to “self-insure” – and are fighting back against what they believe are spurious personal injury claims being made against them.
And while Mr McCambridge said this was to be welcomed, it wasn’t an option for smaller firms, adding that if it’s not an option for his business in the centre of Galway City, then it’s certainly not something family businesses out the county could countenance.
“Small businesses, family businesses – and sports clubs, voluntary organisations and charities – they can’t do that.
“We’re basically stuck with the insurance companies – and in some cases, like with children’s play centres, there is only one insurance company that will insure them,” said Mr McCambridge, adding “it’s basically a cartel”.
Insurance companies, he said, were settling too soon with injury claims that were less than convincing, instead of going through the Personal Injury Assessment Board (PIAB).
This was because there was less to be made for the legal profession by going through PIAB.
“I have no issue, if it’s a genuine claim, paying someone’s medical costs, but in one case, we had a claim against us from someone who didn’t have any loss of earnings and they were granted €28,000 for lost earnings and there were €16,000 in fees.
For more, read this week’s Galway City Tribune.
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